**Pre-Market Market Movements**
1. On August 20 (Wednesday) during US pre-market trading, all three major US stock index futures declined. As of press time, Dow futures fell 0.11%, S&P 500 futures dropped 0.08%, and Nasdaq futures declined 0.16%.
2. As of press time, Germany's DAX index fell 0.41%, the UK's FTSE 100 rose 0.26%, France's CAC 40 gained 0.12%, and Europe's Stoxx 50 remained flat at 0.00%.
3. As of press time, WTI crude oil rose 1.25% to $62.54 per barrel, while Brent crude increased 1.11% to $66.52 per barrel.
**Market News**
**Tech Giants Face Largest Underweight Position in 16 Years, Morgan Stanley: Fund Rebalancing Could Drive New Rally**
Morgan Stanley's latest research indicates that major technology stocks including Google, Amazon, Apple, Meta, Microsoft, and NVIDIA are experiencing the most significant underweight positioning by actively managed funds in 16 years, with the gap between portfolio weights and S&P 500 index weights widening further in the second quarter.
The firm's analysts suggest this seemingly contradictory phenomenon could actually benefit tech stocks. They note that current investors and active management funds are not only underweight on tech giants overall but have also failed to adequately allocate to standout performer NVIDIA. Analysts state that "current holding levels are lower than three months ago," suggesting institutional funds still have room to increase positions, potentially providing momentum for future tech stock gains.
**Wall Street Veteran Who Accurately Predicted "Summer Selloff" Issues Major Warning: US Retail Investor Buying Frenzy May Pause in September**
According to Scott Rubner, Head of Equity and Equity Derivatives Strategy at Citadel Securities, retail investors—the main driving force behind this year's record-breaking US stock market rally—may significantly slow their previously frenzied stock buying pace in September, potentially resuming activity later this year.
Rubner has accurately predicted two major US stock corrections in recent years. Citadel Securities data dating back to 2017 shows that after exceptionally strong June and July periods, retail buying activity typically begins to slow significantly in August, with September often marking the relative low point for retail participation throughout the year.
**Treasury Secretary's 150 Basis Point Rate Cut Proposal Questioned, Deutsche Bank: Aggressive Rate Cuts Lack Model Support**
Deutsche Bank's interest rate strategy team has questioned US Treasury Secretary Yellen's statements regarding Federal Reserve policy rates, arguing that her proposals lack model support. Deutsche Bank strategists' analysis shows the current federal funds rate is in a relatively reasonable range of 4% to 4.65%, consistent with results derived from traditional monetary policy models including the Taylor Rule.
The team emphasizes that based on model systems incorporating key indicators such as core PCE inflation and unemployment rates, current interest rate levels are fundamentally aligned with economic conditions, with only 25 basis points of fine-tuning room available.
**US Budget Agency Warning: Federal Deficit to Surge Nearly $1 Trillion Over Next Decade**
A budget oversight organization states that due to tax, spending legislation, and tariff policies, the US federal budget deficit over the next decade will be nearly $1 trillion higher than the Congressional Budget Office's (CBO) January forecast.
The Committee for a Responsible Federal Budget (CRFB), which advocates for deficit reduction, projects cumulative deficits from fiscal years 2026 to 2035 will reach $22.7 trillion, compared to the CBO's January prediction of $21.8 trillion based on laws and policies in place before the current administration took office.
**Individual Stock News**
**"AT&T Moment" Approaching? Tech Giant Google (GOOGL.US) Faces Antitrust Crisis, Chrome May Be Forced to Sell**
Following Google's defeat in its biggest antitrust challenge—with a US judge ruling in 2024 that it illegally monopolized the search engine market—the tech giant now faces the possibility of being forced to divest core business units.
The US government has indicated it wants Google to sell its Chrome web browser business to the market and license its search data to competitors—which would represent the largest forced breakup of a US company since AT&T's 1984 divestiture.
US District Judge Amit Mehta is expected to soon issue a final ruling outlining significant remedial measures to address Google's monopolistic behavior. OpenAI and Perplexity AI have already expressed strong interest in acquiring Google's Chrome business.
**Meta (META.US) Reorganizes AI Team Again, Betting Billions on Super Intelligence**
Meta is splitting its newly formed artificial intelligence team into four separate groups and conducting a massive reallocation of existing AI employees. This represents the company's attempt to better utilize top-tier talent resources acquired at a cost of billions of dollars.
According to an internal memo from former Scale AI CEO and current Meta Chief AI Officer Alexandr Wang, the new architecture aims to "accelerate" the company's pursuit of so-called super intelligence. Wang stated: "The age of super intelligence is approaching, and we must reorganize around key areas essential to achieving this goal—research, products, and infrastructure."
A source familiar with the matter revealed that Tuesday's reorganization plan did not involve layoffs.
**Target (TGT.US) Q2 Results Beat Expectations, Announces New CEO Appointment**
Target reported Q2 net sales declined 0.9% year-over-year to $25.21 billion, beating market expectations of $24.94 billion. Comparable sales fell 1.9%, better than the expected decline of 2.9%. Adjusted earnings per share reached $2.05, slightly above market expectations of $2.04.
The company reiterated its full-year adjusted earnings per share guidance of $7-9. Target also announced that current Chief Operating Officer Michael Fiddelke will succeed CEO Brian Cornell, with the new appointment effective February 1, 2026.
As of press time, Target shares fell over 9% in Wednesday pre-market trading.
**Lowe's (LOW.US) Q2 Results Beat Expectations, Raises Full-Year Guidance**
Lowe's reported Q2 revenue of $23.96 billion, slightly above market expectations of $23.95 billion. Comparable sales increased 1.1%, meeting market expectations. Adjusted earnings per share reached $4.33, beating market expectations of $4.24.
Lowe's previously indicated it would focus on price competition to avoid losing market share but did not rule out price increases. Rival Home Depot has already announced plans for modest price adjustments.
The company raised its full-year revenue guidance to $84.5-85.5 billion from the previous $83.5-84.5 billion, and increased adjusted earnings per share expectations to $12.10-12.35 from the prior $12.15-12.40.
As of press time, Lowe's shares rose over 3% in Wednesday pre-market trading.
**Estée Lauder (EL.US) Q4 Net Loss Widens Year-over-Year, Expects Tariffs to Impact Fiscal 2026 Earnings by $100 Million**
Estée Lauder reported fourth-quarter sales declined 12% year-over-year to $3.41 billion, slightly above market expectations of $3.4 billion. Net loss reached $546 million compared to a net loss of $284 million in the prior year period.
The company noted its net profit was impacted by $527 million in restructuring and asset impairment charges, as well as a $172 million adjustment to deferred tax asset valuation allowance in the US. Adjusted earnings per share reached 9 cents, beating market expectations of 7.3 cents.
The company expects tariffs to impact fiscal 2026 earnings by approximately $100 million. Estée Lauder projects fiscal 2026 organic net sales growth of 0%-3%, compared to market estimates of 1.94% growth.
As of press time, Estée Lauder shares fell over 7% in Wednesday pre-market trading.
**Baidu (BIDU.US) Q2 Attributable Net Profit Reaches 7.322 Billion Yuan**
Baidu released second-quarter 2025 results, achieving total revenue of 32.713 billion yuan (all figures in yuan), down 4% year-over-year. Net profit attributable to Baidu reached 7.322 billion yuan, up 33% year-over-year. Diluted earnings per American Depositary Share reached 20.35 yuan.
In Q2 2025, Baidu's autonomous ride-hailing service Apollo Go provided over 2.2 million fully autonomous rides, up 148% year-over-year. As of August 2025, Apollo Go has provided over 14 million autonomous rides to the public.
**iQiyi (IQ.US) 2025 Q2 Total Revenue 6.63 Billion Yuan: Continuous Hit Content, Sustained Investment in AI, Short Series, Experience and International Business**
iQiyi's second-quarter total revenue reached 6.63 billion yuan. Membership services revenue was 4.09 billion yuan, online advertising services revenue was 1.27 billion yuan, content distribution revenue was 440 million yuan, and other revenue was 830 million yuan.
During the quarter, iQiyi's Non-GAAP operating profit was 58.7 million yuan, maintaining Non-GAAP operating profitability for 14 consecutive quarters.
**KingSoft Cloud (KC.US) Q2 Revenue Growth Accelerates, AI Revenue Surges Over 120% to 730 Million Yuan**
KingSoft Cloud released second-quarter 2025 financial results. During the quarter, AI positively impacted core business operations, driving strong overall performance growth.
Financial results show KingSoft Cloud's Q2 revenue reached 2.35 billion yuan, up 24.2% year-over-year and 19.3% quarter-over-quarter. AI billing revenue reached 730 million yuan, up over 120% year-over-year, with its share of public cloud revenue climbing to 45%.
**Futu Holdings (FUTU.US) Q2 Revenue Up Nearly 70% Year-over-Year, Net Profit Doubles**
Data shows Futu's second-quarter total revenue reached HK$5.311 billion (approximately $677 million), up 69.7% year-over-year. Under Non-GAAP standards, net profit was HK$2.66 billion (approximately $339 million), up 105.2% year-over-year.
By business segment, second-quarter trading commission and fee income was HK$2.579 billion (approximately $329 million), up 87.4% year-over-year. Interest income was HK$2.288 billion (approximately $292 million), up 43.8% year-over-year. Other income (including wealth management and corporate services) was HK$444 million (approximately $56.6 million), up 175.8% year-over-year.
As of press time, Futu Holdings shares rose over 3% in Wednesday pre-market trading.
**Sociedad Química y Minera (SQM.US) Q2 Profits Plunge 28% Due to Lithium Price Decline, Expects Price Recovery**
One of the world's top lithium producers, Sociedad Química y Minera, saw core earnings decline in the second quarter as prices for the battery material fell to multi-year lows.
Adjusted earnings excluding specific items fell 28% year-over-year to $307.9 million. Additionally, the company stated in charts accompanying its earnings report: "Recent market dynamics make us believe that third-quarter prices may be higher than second-quarter levels."
**Important Economic Data and Event Schedule**
11:00 PM Beijing Time: Fed Governor Waller speaks at Wyoming blockchain symposium 2:00 AM Beijing Time (next day): Fed releases monetary policy meeting minutes 3:00 AM Beijing Time (next day): 2027 FOMC voting member and Atlanta Fed President Bostic speaks on economic outlook
**Earnings Preview**
Thursday morning: FinVolution Group (FINV.US) Thursday pre-market: Walmart (WMT.US), Full Truck Alliance (YMM.US), Bilibili (BILI.US), MINISO Group (MNSO.US), Canadian Solar (CSIQ.US), Yiren Digital (YRD.US)
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